For now, India is suffering from capital flight, along with emerging markets everywhere India’s checkered history with foreign investors is making one of the biggest emerging markets look particularly vulnerable at a time when its need for overseas funding has never been clearer.
Decades of semi-socialist, self-reliance based policies following independence left a legacy of ambivalence, or even skepticism, towards overseas capital.
As recently as last year, plans for an inaugural offshore sovereign bond provoked a wave of controversy. That could all change now that India faces both a sharp economic slowdown and a rapid expansion in borrowing needs.